Lump Sum or Annuity Payment as Pension Options

What is a pension? Many people are surprised to find out that it’s not a 401k or 403b. A pension is an employer-sponsored plan that is designed to provide an income stream for life – and by definition, that’s an annuity. In this episode, we discuss 5 things you need to take into consideration when deciding the best way to take your pension (unless you’re a teacher or government worker, in which case you don’t have a choice – you have to take the monthly income):

1. what is the break-even period (not counting interest or dividends or potential growth)

2. what is the return on investment

3. do you need the income

4. do you have enough saved outside of your pension

5. do you care about leaving an inheritance